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APOORVA SHANTILAL SHAH HUF VS.

COMMISSIONER OF INCOME TAX


GUJARAT 1 AHMEDABAD

LAWS(SC)-1983-3-2
AIR(SC)-1983-0-409

SUPREME COURT OF INDIA


Coram :- P.N.Bhagwati , A.N.Sen J.
Decided on March 03, 1983
Civil
APOORVA SHANTILAL SHAH,HUFAppellant
VERSUS
COMMISSIONER OF INCOME TAX,GUJARATRespondents
Final Verdict :- Appeal allowed
Advocates :- P.H.Parekh , Harish N.Slave , Gautam Philip , S.C.Manchanda
, Anil Dev Singh , A.Subashini

JUDGEMENT
AMARENDRA NATH SEN 1. THE Principal question for decision in this appeal by Special Leave is
whether the father in exercise of his right as patria potes as or otherwise
can effect a partial partition between himself and his minor sons of joint
family properties of a Hindu joint family governed by the Mitakshara
School of Hindu law.

2. THE assessee, a Hindu undivided family (hereinafter referred to as H. U.


F.), which consists of four members, namely, (1) Shri Apoorva Shantilal
Shah, (2) his wife Smt. Karuna and their minor sons, (3) Chinton and (4)
Tejal, is the appellant before us. THE members of the H. U. F. are governed
by the Mitakshara School of Hindu law. THE assessment year in question is
the year 1975-76, During the assessment pertaining to the assessment
year under consideration, Shri Apoorva who is the father of the minor sons
and husband of Smt. Karuna and the Karta of the H. U. F. made an
application to the Income-tax Officer for recognising partial partition under
Section 171 of the Income-tax Act. 1961 (hereinafter referred to as the
Act), claiming that two partial partitions had taken place amongst the
members of the said family, one on 24-12-1973 in respect of 200 shares

of Gujarat Steel Tubes Ltd. and the other on 29-12-1973 in respect of 1777
shares of the same company.
On enquiry the Income-tax Officer (hereinafter for the sake of brevity
referred to as I. T. O.) found that the partial partitions had been embodied
in memoranda of agreement of partition. The I. T. O. however, refused to
record that there had been a partial partition of joint family properties, as
he was of the view that partial partitions in question could not be
recognised inasmuch as the remaining shares, after making certain
allocations in favour of the two minor sons were not allotted in their
entirety to the remaining third coparcener, namely, Shri Apoorva,
separately or to Shri Apoorva and his wife Karuna jointly, describing them
as members of the H. U. F. The I. T. O. further held that the said partitions
did not purport to have been made at the instance of the minor children,
as this course would require the approval of the Court but the same had
been purported to have been made at the instance of Shri Apoorva. The
I.T. O. hinted in the order that the distribution of the shares had not been
made equally either amongst the three members including the two minor
sons or amongst the four members of the H. U. F., as Apoorva's wife
'Karuna also became entitled to an equal share on partition between the
father and the sons.
Against the order of the I. T. O. the assessee H. U. F. presented an appeal
before the Appellate Assistant Commissioner (hereinafter referred to as A.
A. C. for the sake of brevity). The A. A. C. allowed the appeal and held that
there had been genuine partial partitions between the coparceners in
respect of the said shares. The A. A. C. held that it was not necessary to
obtain Court's sanction even in a case where some of the parties to the
partition were minors. As regards the point that the distribution of shareholdings had not been made on equal basis, the A. A. C., taking into
consideration some earlier partitions, came to the conclusion that the
distribution had been equally made. The A. A. C. further observed that
even if the distribution had not been made on equal basis that would not
affect the validity of the partitions in question and the minor sons, if they
felt aggrieved in this regard, could on attainment of majority seek to avoid
the said partitions.
3. AGGRIEVED by the order of the A. A. C., the Revenue went up in appeal
to the Income-tax Appellate Tribunal (referred to as Tribunal hereinafter for
the sake of brevity) to challenge the A. A. C.'s recognition of the said
partitions. The Tribunal held for reasons recorded in the order that partial
partitions in the instant case were outside the frame. work of the Hindu
law and as such they could not be recognised as valid for the purposes of
Section 171 of the Act. In that view of the matter the Tribunal set aside
the A.. A.. C.'s order and restored the order of the I. T. O.
Under Section 256 (1) of the Act, the Tribunal referred the following
questions to the High Court:(1) Whether on the facts and in the circumstances of the case, the
Tribunal was right in holding that Shri Apoorva Shantilal could not himself

have given consent on behalf of his minor sons to the partitions proposed
by him in his individual capacity as father?
(2) Whether on the facts and in the circumstances of the case, the
Tribunal was right in holding that the partial partitions were outside the
framework of Hindu law?
(3) Whether on the facts and in the circumstances of the case, the
Tribunal was right in holding that the partial partitions could not be
recognised as valid for the purpose of Section 171 of the Income-tax Act,
1961?
(4) Whether on the facts and in the circumstances of the case, the
Tribunal was right in holding that partial partitions made by a Hindu father
in exercise of his patria potestas cannot be recorded as a valid partition
under Section 171 of the Income-tax Act, 1961 ?
(5) Whether on the facts and in the circumstances of the case, the
Tribunal was right in holding that the partial partition did not amount to a
family arrangement in which the father acted as a natural guardian of the
two minor sons after he had exercised his patria potestas ?
(6). Whether the Income-tax Department is competent to challenge the
exercise of patria potestas by a Hindu father in respect of coparcenary
property, making in partial partition ?
4. FOR reasons recorded in the judgment the High Court answered all the
questions in the affirmative and against the assessee. The High Court in
its judgment has held that the father under the Hindu law has no power of
authority to effect any partial partition of joint family properties between
himself and his minor sons. The High Court has observed that apart from
the decision of the Madhya Pradesh High Court in the case of Commr. of
Income-tax v. Seth Gopaldas (H. U. F.), (1979) 116 ITR 577 : (1979 Tax LR
546); there was no decision of any Court on the point. The High Court also
considered other decisions and books and treatises on Hindu law. The
High Court held that on a consideration of the authorities, the following
propositions were established.
1. From the standpoint of ancient Hindu law, what was recognised was
only a partition in respect of all the properties of the H. U. F., upon
disruption of the status of H. U. F. regardless of whether the properties
were actually divided by metes and bounds or whether these were
thereafter (after disruption of joint status) held as tenants-in-common.
2. Partial partition in the sense of division in respect of part of the assets
while continuing the status of HUF in respect of rest of the assets was not
known to the ancient Hindu law and was not recognised by ancient Hindu
law.
3. Partial partition in the sense of division of some of the properties whilst
continuing the status of HUF in respect of other items of property
originally belonging to the HUF came to be recognised only later on by
evolution of custom and by Judge made law.
4. Such a partial partition was so recognised only if it was made by
consent of all the coparceners. In other words, partial partition in respect
of only some items of properly whilst continuing the status of HUF in

respect of rest of the items of property could be effected only with the
consent of all the coparceners. When there was a disruption of the status
of the HUF only one or more of the coparceners could not insist for
division of some items of the property without effecting division in respect
of all the items of properties except by consent of all the coparceners.
5. In respect of a joint family consisting of a father and his sons, the
traditional Hindu law recognised the right of a father in his capacity as
patria potestas to exercise his extraordinary power to disrupt the status of
HUF and to divide his sons inter se without their consent subject to the
rider that 'all' assets of the HUF were subjected to partition..
6. The aforesaid extraordinary power is subject to the qualification that he
gives to his sons an equal share and division is not unfair . 'The power of
the father to sever the sons inter se is a survival of the patria potestas
and may be exercised by him without the consent of his sons" ... ... . .
"Again, in all cases his power must be exercised by him bona fide and in
accordance with law; the division must not be unfair and the allotment
must be equal. He must give his sons equal share with himself".
7. There is nothing in (1) either ancient Hindu Law or (2) customary or
Judge-made law which authorises the father in exercise of his
extraordinary power to effect a partial partition of HUF consisting of
himself and his minor sons by dividing some items of properties whilst
continuing the joint status in respect of the rest of the properties. The
High Court observed: "The validity of the aforesaid propositions is incapable of being disputed
and has not been disputed. What has been contended on behalf of the
assessee is that whilst there is no express provision in so many words,
either in the ancient Hindu texts or Judgement law, that the power of a
Hindu father to effect partition of a HUF consisting of himself and his sons
including minor sons in exercise of his power as patria potestas extends
even to partition in respect of only some items of property it is required to
be inferred by implication. In other words, it is argued that though there is
no express reference to the power to effect that partial partition in the
sense of division of some items of property while continuing the status of
HUF in respect of the rest and though such power is not recognised in
terms, it follows as a necessary corollary."
The High Court noted that this contention has been negatived by the
Madhya Pradesh High Court in the case of Gopaldas (supra) and the High
Court for reasons recorded in the judgment rejected this contention. The
High Court further held that the transaction in question was in any event
invalid in the facts and in the circumstances of this case.
Aggrieved by the judgment of the High Court, the assessee with special
leave granted by this Court has preferred this appeal.
In this appeal before us, two main contentions have been urged on behalf
of the appellant. The first contention urged is that the High Court went
wrong in holding that the father cannot effect any valid partial partition
between himself and his minor sons of joint family property belonging to a
Hindu undivided family consisting of himself, his wife and minor sons who
are governed by the Mitakshara School of Hindu Law. The other contention

raised is that the High Court erred in coming to the conclusion that in the
facts and circumstances of this case, the partial partitions were invalid.
5. MR. Desai learned counsel appearing on behalf of the appellant has
advanced the following arguments.
1. According to the Mitakshara School of Hindu Law, the father has a
power to divide ancestral property among his sons and the partition made
by him is binding on his sons provided that the power is exercised bona
fide and in accordance with law which regulates and restricts it in the
interests of his sons. This power on the part of the father is recognised in
text books on Hindu law and has been accepted in a number of decisions
beginning with the case of Kandaswami. v. Doraisami Ayyar, ILR (1880) 2
Mad 317.
2. A father in any such case of ancestral property has the power to
separate from all or from even some of his sons remaining joint with the
other sons or leaving them to continue as a joint family with each other.
The consent of the sons is not necessary for the exercise of that power
whether they are majors or minors. In this connection reference is made
to para 323 of Hindu Law by D. F. Mulla and para. 458 of Mayne's Hindu
Law (11th Edn.)
Para 323 of Mulla's Hindu Law, 11th Edn. reads as follows:"The father of a joint family has the power to divide the family property at
any moment during his life, provided he gives his sons equal shares with
himself, and if he does so, the effect in law is not only a separation of the
father from the sons, but a separation of the sons inter se. The consent of
the sons is not necessary for the exercise of that power. But a grandfather
has no power to bring about a separation among the grand. sons. The
right of a father to sever the sons inter se is a part of the patria potestas
still recognised by the Hindu Law."
Para 458 of Mayne's Hindu Law and Usage, and 560 reads as follows :"Partition may be either total or partial. A partition may be partial either
as regards the persons making it or the property divided.
It is open to the members of a joint family to sever in interest in respect of
a part of the joint estate while retaining their status of a joint family and
holding the rest as the properties of an undivided family.
Any one coparcener may separate from the others, but no coparcener
except the father or grandfather, can compel the others to become
separate amongst themselves. A father may separate from all or from
some of his sons, remaining joint with the other sons or leaving them to
continue a joint family with each other. A separation between
coparceners, for instance, between two brothers, does neither necessarily
nor even ordinarily involve a separation between either of the coparceners
and his own sons."
3. So extensive and wide is this patriarchal power of the father that it has
been recognised even in cases where all the sons were minors or an only
son was a lunatic. Reference is made to the decision of the Bombay High
Court in the case of Babu Hambira Patil v. Shankar Bhau Patil AIR 1926

Bom 160 and to the decision of the Madras High Court in the case of
Venkateswara Pattar v. K. Mankayammal, AIR 1935 Mad 775.
4. Section 171 of the Income-tax Act, 1961 and Section 25-A of the earlier
Act have beenall along accepted as machinery provisions and not
charging sections. In the earlier Act though there was no express
reference to partial partitions, the preferable view expressed in decisions
under that Act was that if there was a partial partition of an assets of the
family or an asset of the family was divided and a partnership was
constituted and the family continued joint as regards other properties, the
assessment on the basis of undivided Hindu family would be confined to
the income of the properties so remaining undivided and the income of
the property partitioned would be excluded from the computation of the
income for assessment. It was only income received from the properties
not partitioned that would be considered to be the income of the joint
family. Reliance has been placed on the decision in the case of Charandas
Haridas v. C. I. T., Bombay, (1960) 39 ITR 202: ( AIR 1960 SC 910).
5. This power of the father has been described as his "superior power" or
"peculiar power" or "patria. potestas". There is neither principle nor
authority for the proposition that the exercise of this independent and
extensive power of the father even in the context of minor sons could not
take into its purview the lesser power to partition only some of the family
properties without disrupting the status of the members of the joint family
as regards other properties even when it is a genuine exercise of the
lesser power. At no time was there recognised any limitation or inhibition
on the power of the father though of course the partition effected by him
had to be fair and equitable. There is no text of Hindu Law which prohibits
partial partition whether as to person or as to property.
6. The decision of the Privy Council in the case of Appovier v. Rama Subba
Aiyan, (1966) 11 Moo Ind App 75, when it speaks of partial partition of the
joint family by agreement of the coparcener cannot possibly be read as
restricting the patriarchal and superior power of the father to effect
division of the entire joint family properties and to exclude operation in
case of exercise of the lesser right of division of only some of the family
properties.

6. MR. Manohanda learned counsel appearing on behalf of the department


has advanced the following arguments:
1. Under ancient Hindu Law, partial partition was unknown. Severance of
status disrupted the family. The joint family need not necessarily have any
property. If it has property, then its separation is only an incidence of the
severance of status.
2. Partial partition is Judge-made law and the earliest case where this was
mooted was in 1846 in the case of Rewun Prashad V. Radha Beeby, (1846)
4 Moo Ind App 137 . This was followed in Appovier's case (supra) and then
in certain decisions of Indian Courts. Reference is also made to para 458
of Mayne's Book on Hindu Law and Usage for contending that agreement
between the parties is a sine qua non.

3. The powers of patria potestas are confined mainly to the power to sever
the status of the joint family as a whole. Judge-made law which has
recognised partial partition has attempted to extend the ancient, feudal
archaic patriarchal powers of patria potestas to joint families so as to
include the power of partial partition with the consent of the parties. There
could be no justification for now extending it, particularly as the
legislature itself, as per the Finance Act (2) 1980 w. e. f. 1-4-1980 has derecognised partial partition altogether. Sub-section (9) has been added to
Section 171 of the Act and by this provision partial partition of a HUF
effected after 31-12-1978 will be de-recognised for income-tax purposes
and this sub-section has been incorporated with the object of curbing the
creation of multiple HUF by making partial partitions. Where a HUF is
taxed in the status of HUF it will continue to be taxed as such unless there
has been a total partition of the family properties by metes and bounds
and an order to that effect is recorded by I. T. O.
4. The powers of patria potestas of a father have always been understood
to be restricted and limited to a complete and whole partition. This power
can only be exercised with regard to the entire property, provided the
property is divided equally and fairly by the father.
We may observe that in course of the hearing, reference was made to a
number of decisions of various Courts by the learned counsel for the
parties.
We shall now proceed to consider the decisions which appear to us to
have a material bearing on the question involved in the appeal. We shall
first refer to the decision of this Court in the case of Charandas Haridas
(1960-39 ITR 202 : AIR 1960 SC 910) (supra). This decision which appears
to have a clear bearing on the question and which considers an earlier
decision of the Privy Council, does not appear to have been cited before
the High Court. The material facts of this case may be briefly noted:Charandas Haridas was the Karta of a Hindu undivided family consisting of
his wife, Shantaben, three sons and himself." He was a partner in six
managing agency firms in six mills. In previous years the income received
by him as partner in these Managing Agencies was being assessed as the
income of the Hindu undivided family. On Dec. 11, 1945 Charandas
Haridas acting for his three minor sons and himself and Shantaben his
wife. entered into an oral agreement for partial partition. By that
agreement Charandas Haridas gave one pie share to his daughter
Pratibha in the managing agency commission from two of the six
managing agencies held by the family. The balance together with the
other shares in the other managing agencies was divided in five equal
shares between Charandas Haridas, his wife and sons. This agreement
was to come into effect from 1/01/1946 which was the beginning of a
fresh accounting year, On 11th Sept., 1946 Charandas Haridas acting for
himself and his minor sons and Shantaben executed a memorandum of
partial partition in which the above facts were recited, the document
purporting to be a record of what had taken place orally earlier. In the
assessment years 1947-48 and 1948-49, Charandas Haridas claimed that
the income should no longer be treated as income of Hindu undivided
family but as separate income of the divided members. The Income-tax

Officer declined to treat the income as any but of the Hindu undivided
family, and assessed the income as before. An appeal to the Appellate
Assistant Commissioner was unsuccessful and the matter was taken to the
Income-tax Appellate Tribunal. The Tribunal held that by the document in
question, the division, if any, was of the income and not of the assets from
which the income was derived inasmuch as "the agreements of the
managing agency with the managed companion did not undergo any
change whatever as a result of the alleged partitions." The Tribunal,
therefore, held that the arrangement to share the receipts from this
source of income was not binding on the department, if the assets
themselves continued to remain joint. It further held that the document
was "a farce", and did not save the family from assessment as Hindu
undivided family. The following question as directed by the High Court on
the application of Charandas Haridas was referred to the High Court:"'Whether there were materials to justify, the finding of the Tribunal that
the income in the share of the commission agency of the mills was the
income of the Hindu undivided family?"
The High Court held that though the finding given by the Appellate
Tribunal could not be construed as a finding that the document was not
genuine, the method adopted by the family to partition the assets was
insufficient to bring about the results intended by it. According to the High
Court the Tribunal was right in holding that the document was in effective
and though the income might have been purported to be divided and
might, in fact, have been so divided, the source of income still remained
undivided as belonging to the Hindu undivided family. The High Court
accordingly answered the question in the affirmative holding that there
were materials before the Tribunal to enable the Tribunal to reach the
conclusion that in so far as these income-bearing assets were concerned,
they still belonged to the Hindu undivided family. The assess Charandas
Haridas filed an appeal in this Court with special leave granted by this
Court. This Court allowed the appeal this Court referred to the following
observations of the Privy Council in Appovier v. Rama Subba Aiyan (186611 Moo Ind App 75) :
"Nothing can express more definitely a conversion of the tenancy, and
with that conversion a change of the status of the family quoad this
property. The produce is no longer to be brought to the common chest, as
representing the income of an undivided property, but the proceeds are to
be enjoyed in six distinct equal shares by the members of the family, who
are thenceforth to become entitled to those definite shares."
Thereafter this Court proceeded to hold :"In our opinion, here there are three different branches of law to notice.
There is the law of partnership, which takes no account of a Hindu
undivided family. There is also the Hindu Law which permits a partition of
the family and also a partial, partition binding upon the family. There is
then the income-tax law, under which a particulars income may be treated
as the income of the Hindu undivided family or as the income of the
separated members enjoying separate shares by partition. The fact of a
partition in the Hindu Law may have no effect upon the position of the
partner, in so far as the law of partnership is concerned, but it has full

effect upon the family in so far as the Hindu Law is concerned. Just as the
fact of a karta becoming a partner does not introduce the members of the
undivided family into the partnership, the division of the family does not
change the position of the partner vis-a-vis the other partner or partners.
The Income-tax Law before the partition takes note, factually, of the
position of the karta, and assessee not him qua partner but as
representing the Hindu undivided family. In doing so, the Income-tax Law
looks not to the provisions of the partnership Act, but to the provisions of
Hindu Law. When, once the family has disrupted, the position under the
partnership continues as before, but the position under the Hindu Law
changes. There is then no Hindu undivided family as a unit of assessment
in point of fact, and the income which accrues cannot be said to be of a
Hindu undivided family. There is nothing in the Indian Income-tax Law or
the law of partnership which prevents the members of a Hindu joint family
from dividing any asset. Such division must, of course, be effective so as
to bind the members; but Hindu Law does not further require that the
property must in every case be partitioned by mates and bounds, if
separate enjoyment can otherwise be secured according to the shares of
the members. For an asset of this kind, time was no other mode, of
partition open to the parties if they wished to retain the property and yet
held it not jointly but in severalty, and the law does not contemplate that
a person should do the impossible. Indeed, the result would have been the
same, even if the dividing members had said in so many words that they
had partitioned the assets, because in so far as the firms were concerned,
the step would have been wholly income-sequential."
This Court further observed :"No doubt, there were many modes of partition which might have been
adopted; but the question remains that if the family desired to partition
these assets only and no more, could they have acted in some other
manner to achieve the same result ? No answer to the question was
attempted. It is, therefore, manifest that the family took the fullest
measure possible for dividing the joint interest into separate interests.
There is no suggestion here that this division was a mere pretence; nor
has the Appellate Tribunal given such a finding. The document was fully
effective between the members of the family, and there was actually no
Hindu undivided family in respect of these particular assets."
In the case of Kalloomal Tapeswari Prasad (HUF) v. Commr. of Income-tax,
Kanpur, (1982) 133 ITR 690, this Court observed :
"Under Hindu Law partition may be either total or partial. A partial
partition may be as regards persons who are members of the family or as
regards properties which belong to it. Where there has been a partition, it
is presumed that it was a total one both as to the parties and property but
when there is a partition between brothers, there is no presumption that
there has been partition between one of them and his descendants. It is,
however, open to a party who alleges that the partition has been partial
either as to persons or as to property, to establish it. The decision on that
question depends on proof of what the parties intended - whether they
intended the partition to be partial either as to persons or as to properties
or as to both. When there is partial partition as to property, the family

ceases to be undivided as regards properties in respect of which such


partition has taken place but continues to be undivided with regard to the
remaining family property. After such partial partition the right of
inheritance and alienation differ according as to property in question
belongs to the members in their divided or undivided capacity. Partition
can be brought about, (1) by a father during his lifetime between himself
and his sons by dividing equally amongst them, (2) by agreement, or (3)
by a suit or arbitration."
These two decisions of this Court clearly state that partial partition under
Hindu Law is permissible.

7. WE may mention that in the case of Moti Lal Shyam Sunder v. Commr.
of Income-tax, U. P., (1972) 84 ITR 186, a Division Bench of the Allahabad
High Court also recognised the validity of partial partition. R. S. Pathak, J.,
(as his Lordship then was) who spoke for the Bench held for reasons
stated in the judgment that the Tribunal was in error in holding that there
was no valid partial partition in law on 1/07/1961.
It may be noted that in the case of Charandas Haridas decided by this
Court and in the case of Motilal Shyam Sunder (1972-84 ITR 186) (supra)
decided by the Allahabad High Court, to which we have just referred, all
the sons were minors.

8. WE have earlier quoted the relevant passages on the subject from


Mulla's Hindu Law and from Mayne's Hindu Law and Usage. WE may now
quote the following observations appearing in 'Mitakshara and Daya
Bhaga - Two Treatises on the Hindu Law of Inheritance translated by H. T.
Colebrooke, Esq.', in Chap. I, Section II (2)"When a father wishes to make a partition, he may at his pleasure
separate his children from himself, whether one, two or more sons."
In 'History of Dharmashastra' by Shri P. V. Kane , it has been stated :
"The Manager is called Karta in modern times though the smritis and
digests employ words like Kutumbin (Yaj IL 45), Grhin, Grhapali, Prabhu
(Kat. 543) and not Karta. He has special powers of disposition (by
mortgage, sale or gift) of family property in a season of distress (for
debts), for the purposes and benefit of the family (maintenance, education
and marriage of members and other dependents) and particularly for
religious purposes (Sraddhas and the like). The father has the same
powers as Manager and certain other special powers, which no other
coparcener has. The father can separate his sons from himself and also
among themselves if he so desires, even if they do not desire to separate.
(Yaj. II. 114)."
There are observations more or less to the similar effect in the other
commentaries on Hindu Law by other learned authors. We do not,
therefore, consider it necessary to refer to the comments of the other
learned authors placed bef6re us in course of the hearing of the appeal.

The various commentaries on Hindu Law by the various learned authors


go to indicate that ancient Hindu Law speaks of complete severance of
joint family and partition of joint family properties and does not mention
partial partition either with regard to the joint family properties or with
regard to some of the members of the joint family. The right of the father
to bring about the disruption of the joint family properties in exercise of
his superior right as father or of his rights as patria potestas is recognised
in ancient Hindu Law.

9. IT is, however, well settled by judicial decisions, that partial partition of


a joint Hindu family qua some joint family properties or qua some
members of the joint family is permissible and valid in law. The High Court
appears to have accepted this position but the High Court then proceeds
to hold that the proposition laid down by judicial decisions with regard to
partial partition will apply only when partial partition is effected with the
consent of the members of the joint family and cannot be extended to a
case where partial partition is sought to be brought about by father in
exercise of his superior rights as father or his right, as patria potestas. On
an anxious and careful consideration of the matter we are unable to agree
with the view expressed by the High Court.

10. IF the father in exercise of his superior right or of his right as patria
potestas is entitled to bring about a complete disruption of the joint family
and to effect a complete partition of joint family properties of a Hindu joint
family consisting of himself and his minor sons even against the wishes of
the minors and if partial partition be permissible with the consent of sons
when they have all become major, we see no reason to limit the power or
authority of the father to effect the partition only to a case where the
partition is total. The superior right or the right of patria potestas which a
father enjoys is always expected to be exercised in the best interest of the
members of the family and more particularly his minor sons. The father,
undoubtedly, enjoys the right to bring about a complete disruption of the
joint family consisting of himself and his minor sons and to effect a
complete partition of the joint family properties even against the Will of
the minor sons. It is also now recognised that partial partition of joint
family properties is permissible. When father can bring about a complete
partition of joint family properties between himself and his minor, sons
even against the Will of the minor sons and when partial partition under
the Hindu Law is not accepted and recognised as valid by judicial
decisions, we fail to appreciate on what logical grounds it can be said that
the father who can bring about a complete partition of the joint family
properties between himself and his minor sons will not be entitled to
effect a partial partition of joint family properties between himself and his
minor sons, if the father in the interest of the joint family and its members
feels that partial partition of the properties will be in the best interest of

the joint family and its members including the minor sons. Even if the test
of consent is to apply, the father as the natural guardian of the minor sons
will normally be in a position to give such consent and it cannot be said as
a matter of universal application that in all such cases of partition, partial
or otherwise, there is bound to be a conflict of interest between the father
and his sons. IF the father does not act bona fide in the matter when he
effects partition of joint family properties between himself and his minor
sons, whether wholly or partially, the sons on attaining majority may
challenge the partition and ask for appropriate reliefs including a proper
partition. In appropriate cases even during minority, the minor sons
through a proper guardian may impeach the validity of the partition
brought about by the father either in entirety of the joint family properties
or only in respect of part thereof, if the partition had been effected by the
father to the detriment of the minor sons and to the prejudice of their
interests.
We may point out that in the case of Charandas Haridas ( AIR 1960 SC
910) to which we have earlier referred and in which this Court recognised
the validity of partial partition brought about by the father of some joint
family properties, the sons were all minors. Also in the case of Motilal
Shamsunder (1972-84 ITR 186) earlier quoted, where the Allahabad High
Court, recognised the validity of a partial partition brought about by the
father between himself and his sons, all the sons were minors.
The decision of this Court in the case of Charandas Haridas and the
observations of this Court in the case of Kalloomal Tapeswari Prasad (AIR
1982 SC 760) (supra) which we have earlier quoted, in our opinion, clinch
the decision of the question.

11. WE must, therefore, hold that partial partition of properties brought


about by the father between himself and his minor sons cannot be said to
be invalid under the Hindu Law and must be held to be valid and binding.
WE wish to make it clear that this right of the father to effect a partial
partition of the family properties between himself and his minor sons.
whether in exercise of his superior right as father or in exercise of right as
patria potestas has necessarily to be exercised bona fide by the father and
is subject, to the right of the sons to challenge partition if the partition is
not fair and just.
Section 171 of the Income-tax. Act, 1961 provides as follows :
(1) A Hindu family hitherto assessed as undivided shall be deemed for the
purposes of this Act to continue to be a Hindu undivided family, except
where and in as far as a finding of partition has been given under this
section in respect of the Hindu undivided family.
(2) Where, at the time of making an assessment under S. 143 or S. 144, it
is claimed by or on behalf of any member of a Hindu family assessed as
undivided that a partition, whether total or partial, has taken place among
the members of such family, the Income-tax Officer shall make an enquiry
thereinto after giving notice of the enquiry to all the members of the
family.

(3) On the completion of the enquiry, the Income-tax Officer shall record a
finding as to whether there has been a total or partial partition of the joint
family property, and, if there has been such a partition, the date on which
it has taken place.
(4) Where a finding of total or partial partition has been recorded by the
Income-tax Officer under this section, and the partition took place during
the previous year.
(a) the total income of the joint family in respect of the period up to the
date of partition shall be assessed as if no partition had taken place; and
(b) each member or group of members shall, in addition to any tax for
which he or it may be separately liable and notwithstanding anything
contained in clause (2) of S. 10, be jointly and severally liable for the tax
on the income so assessed.
(5) Where a finding of total or partial partition has been recorded by the
Income-tax Officer under this section, and the partition took place after
the expiry of the previous year, the total income of the previous year of
the joint family shall be assessed at as if no partition had taken place; and
the provision of clause (b) of sub-section (4) shall, so far as may be, apply
to the case.
(6) Notwithstanding anything contained in this section, if the Income-tax
Officer finds, after completion of the assessment of a Hindu undivided
family that the family has already effected a partition, whether total or
partial, the Income-tax Officer shall proceed to recover the tax from every
person who was a member of the family before the partition, and every
such person shall be jointly and severally liable for the tax on the income
so assessed.
(7) For the purposes of this section, the several liability of any member or
group of members thereunder shall be computed according to the portion
of the joint family property allotted to him or it at the partition, whether
total or partial.
(8) The provisions of this section shall, so far as may be, apply in relation
to the levy and collection of any penalty, interest, fine or other sum in
respect of any period up to the date of the partition, whether total or
partial of a Hindu undivided family as they apply in relation to the levy
and collection of tax in respect of any such period.
Explanation : In this section. (a) "partition" means (i) where the property admits of a physical division, a physical division of
the property but a physical division of the income without a physical
division of the property producing the income shall not be deemed to be a
partition; or
(ii) where the property does not admit of a physical division then such
division as the property admits of, but a mere severance of status shall
not be deemed to be a partition;
(b) "Partial partition" means a partition which is partial as regards the
persons constituting the Hindu undivided family, or the properties
belonging to the Hindu undivided family, or both.

It may be noted that the following further provision was included in the
said section as sub-section (9) by the Finance (No. 2) Act, 1980 w. e. f.
1/04/1980 :(9) Notwithstanding anything contained in the foregoing provisions of this
section, where a partial partition has taken place after the 31st day of
Dec., 1978 among the members of a Hindu undivided family hitherto
assessed as undivided :(a) no claim that such partial partition has taken place shall be inquired
into under sub-section (2) and no finding shall be recorded under subsection (3) that such partial partition had taken place and any finding
recorded under sub-section (3) to that effect whether before or after the
18th day of June, 1980 being the date of introduction of the Finance (No.
32) Bill 1980. shall be null and void;
(b) such family shall continue to be liable to be assessed under this Act as
if no such partial partition had taken place;
(c) each member or group of members of such family immediately before
such partial partition and the family shall be jointly and severally liable for
any tax, penalty, interest, fine or other sum payable under this Act by the
family in respect of any period whether before or after such partial
partition;
(d) the several liability of any member or group of members aforesaid
shall be computed according to the portion of the joint family property
allotted to him or it at such partial partition;
and the provisions of this Act shall apply accordingly.
This sub-section (9) was not in existence at the relevant time and has no
retrospective operation and it is of no material consequence in deciding
the present case.
12. THE aforesaid provisions of the Income-tax Act, as they stood at the
material time, clearly recognise partial partition. THE definition of partial
partition in explanation (b) makes it clear that partial partition as regards
the persons constituting the Hindu undivided family or as regards
properties belonging to the Hindu undivided family, or both is recognised.
In the present case, the partial partition of the shares belonging to the
Hindu undivided family cannot, therefore, be said to be bad either under
the Hindu Law or under the Indian Income-tax Act. We must, therefore,
hold that the High Court went wrong in deciding that partial partition of
the joint family properties of the Hindu joint family by the father was
invalid and could not be recognised under the Income-tax Act. The
subsequent amendment of Section 171 by the inclusion of sub-section (9)
does not require any consideration as the said sub-section was not in
existence in the relevant assessment year and is only operative from
1/04/1980.
The other question which falls for determination is whether the partition
can be said to be bad as at the time of the partition there was no equal
division of the shares by the father amongst himself and his minor sons
and a part of the share holding had not been distributed to the father or to
the father and mother jointly. We may point out that the A. A. C. has found

that at the time of division of the shares, the shares had been distributed
equally taking into consideration the shares which had earlier been
distributed amongst the parties. In our opinion, a partial partition of any
joint family property by the father between himself and his sons does not
become invalid on the ground that there has been no equal distribution
amongst the co-sharers. It is expected that the father who seeks to bring
about a partial partition of joint family property will act bona fide in the
interests of the joint family and its members, bearing in mind in particular
the interests of the minor sons. If, however, any such partial partition
causes any prejudice to any of the minor sons and if any minor son feels
aggrieved by any such partial partition, he can always challenge the
validity of such partial partition in an appropriate proceeding and the
validity of such partial partition will necessarily have to be adjudicated
upon in the proceeding on a proper consideration of all the facts and
circumstances of the case. Till such partial partition has been held to be
invalid by any competent Court, the partial partition must be held to be
valid. It is not open to the Income-tax Authorities to consider a partial
partition to be invalid on the ground that shares have not been equally
divided and to refuse to recognise the same. It is undoubtedly open to the
Income-tax Officer before recognising the partition to come to a
conclusion on proper enquiry whether the partition is genuine or not. If the
Income-tax Officer on enquiry comes to a finding that the partition is
sham or fictitious, he will be perfectly within his right to refuse to
recognise the same. In the instant case, there is no finding that the partial
partition is sham or fictitious or that the partial partition is not a genuine
one and has not been acted upon. As there is no finding that the partial
partition is sham or fictitious or not a genuine one, on enquiries made by
the Income-tax Officer, and as the partial partition is otherwise valid under
the Hindu Law, the partial partition has necessarily to be recognised under
the provisions of S. 171 of the Income-tax Act and the assessment must
be necessarily made on the basis that there is partial partition of the said
shares.
13. IN the result, the appeal succeeds. The judgment and order of the
High Court are hereby set aside. The partial partition is held to be valid
and the INcome-tax Officer is directed to recognise the same and to
proceed to make the assessment on the basis that there has been a
partial partition of the said shares between the parties. IN the facts and
circumstances of this case, we do not propose to make any order as to
costs.Appeal allowed.